Slovakia's business leaders have strongly condemned a proposed financial transactions tax by Prime Minister Robert Fico, stating that it could have dire consequences for the country's economy. The tax, which is expected to be imposed on all corporate banking transactions, is part of a public finance recovery package totaling 1.4 billion euros.
With one of the highest deficits in the European Union, the Slovak government is under pressure to reduce it from the expected 6% of economic output in 2024 to 5% next year. However, critics argue that the proposed tax would further burden businesses and deter foreign investors.
Neighboring Hungary recently increased its transaction tax, and Slovakia's second-largest employers' union warned that if the country were to adopt Hungary's rate, the tax burden on businesses would surge by 540 million euros annually. The union also criticized the government for not consulting with experts, company representatives, or trade unions before proposing such significant measures.
President of the employers' union, Miroslav Kiralvarga, expressed concerns that the tax, combined with Slovakia's existing high tax burden, would make the country less attractive to foreign investors. The union believes that the lack of consultation and the unilateral decision-making process could harm the business sector and impede economic growth in Slovakia.